Sam Fletcher
Senior Writer
HOUSTON, Apr. 18 -- The near-month crude contract hit an intraday high of $115.54/bbl Apr. 17 on the New York futures market before slipping slightly below the record-high closing of the previous session after the US dollar failed to weaken beyond a $1.60 exchange rate against the euro.
"Oil has been taking so widely its directional clue from the dollar that when the dollar does not move, oil does not know where to go, and when oil does not know where to go, the rest of the commodity spectrum stays as undecided," said Olivier Jakob at Petromatrix, Zug, Switzerland.
Adam Sieminski, global energy economist for Deutsche Bank, said, "We believe the oil price remains mesmerized by the course of the US dollar. If as we expect [the euro] hits $1.62, it would imply the oil price rising to $118/bbl. However, it would require oil prices hitting $145/bbl for the market capitalization of energy companies on the Standard & Poor's 500 to represent a similar share as tech stocks at the peak of the internet bubble."
As for natural gas, the current difference between gas prices in the US and UK markets "will discourage flows to the US," said Sieminski. "While two new LNG terminals took first deliveries this week and another is coming on soon, we expect utilization rates at these facilities will stay low unless US gas prices rise. We remain bullish on price," he said.
Energy prices
The May contract for benchmark US light, sweet crudes dipped 7¢ to $114.86/bbl Apr. 17 on the New York Mercantile Exchange. The June contract was unchanged at $114.45/bbl. On the US spot market, West Texas Intermediate was down 7¢ to $114.86/bbl. Heating oil for May delivery lost 1.56¢ to $3.27/gal on NYMEX. The May contract for reformulated blend stock for oxygenate blending (RBOB) continued to climb, however, up 1.88¢ to $2.96/gal.
The natural gas contract dropped 5¢ to $10.38/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., gained 19.5¢ to $10.26/MMbtu.
In London, the June IPE contract for North Sea Brent crude fell 23¢ to $112.43/bbl. Gas oil for May dropped $7 to $1,037.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes increased 98¢ to $107.63/bbl on Apr. 17.
Contact Sam Fletcher at [email protected].
